Legislature approves two-year budget on final session

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INDIANAPOLIS (AP) - The Republican-controlled General Assembly approved a two-year, $24.3 billion state budget Friday, meeting their only mandate this year with hours to spare before a midnight deadline for adjourning the legislative session.
     
But lawmakers continued working into the evening in hopes of also passing an economic development package that would finance a new stadium for the NFL's Colts, enhance transportation in northwest Indiana and fund several smaller projects around the state.
     
Republican Gov. Mitch Daniels and Democratic Indianapolis Mayor Bart Peterson lobbied privately for the plan during the day, and legislative leaders said they were confident it would pass Friday night.
     
Republicans hailed the spending plan as one that would eliminate the state's $645 million deficit, provide some new dollars for schools and Medicaid and do so without raising state taxes, raiding savings accounts or using bookkeeping gimmicks.
     
"Hoosier families live within a balanced budget and they expect us to do that, too," Republican Rep. Jeff Espich, chairman of the budget-writing House Ways and Means Committee, said before the House approved the plan on a straight 52-46 party-line vote.
     
The Senate passed the bill 31-19 on a mostly party-line vote, and Republican Gov. Mitch Daniels is expected to sign it into law. He has called it the state's most responsible spending plan in a decade.
     
"It is now time to put Indiana's fiscal house in order," said Senate Appropriations Chairman Robert Meeks, R-LaGrange.
     
The only Democrat in either chamber who voted for the bill was Sen. Vi Simpson of Bloomington, and she did that by mistake. Democrats in both chambers blasted the plan, saying it relied on hundreds of millions of dollars in property tax increases and would result in spending cuts for more than 129 school districts unless they raised local taxes even more.
     
Simpson said Republicans could have opted for expanded gambling, capping property tax credits or other ideas to provide more money for schools without raising taxes.
     
"However, that didn't happen, and now property taxes are going to skyrocket while the funding for many of our schools will be dramatically cut," she said.
     
Democrats say the property tax increases could potentially top $800 million over the biennium, and schools could be forced to lay off thousands of teachers.
     
Republicans acknowledged that the budget did rely on some property tax increases to provide basic funding for schools, as past budgets have, but said other potential increases were simply options that schools could approve or reject.
     
The plan would increase basic funding for schools by 1.2 percent the first year and 1.3 percent the second, but the increases would top 2 percent if schools opted for the additional property tax hikes.
     
"Some schools want to spend exceptionally more than that, and they simply are going to have to tighten their belt during this two-year period as state government is tightening its belt," said House Speaker Brian Bosma, R-Indianapolis.
     
Although debate on the budget was long and contentious, lawmakers entered the final hours having already settled their biggest brawl by passing legislation that will move all of Indiana to daylight-saving time next April.
     
The House narrowly approved that bill late Thursday and sent it to Daniels, capping a time debate that has raged in Indiana and its Statehouse for more than three decades. Daniels championed the bill, saying it would eliminate confusion and boost commerce, and was expected to sign it into law in the coming days.
     
The new governor got much of his agenda through the General Assembly, including the time change, tax incentives for businesses, an overhaul in the oversight of Indiana's job-creation efforts, several agency reforms and an inspector general that in some cases could hold powers to prosecute government crimes.
     
(Copyright 2005 by The Associated Press.  All Rights Reserved.)